Friday – August 6, 2021
The labor market got a much-needed shot in the arm in July as employers went on a hiring spree. The Bureau of Labor Statistics reports that there were 943,000 jobs created in July while May and June were revised higher by 119K. The numbers showed that the Unemployment Rate fell to 5.4%, while wages were up by 0.4% monthly and 4% annually, both above estimates. Total unemployed, or the U6 number, fell to 9.2% from 9.8% in June and down from 16.5% in July 2020.
The Labor Force Participation Rate was unchanged at 61.7% and remains stubbornly low … meaning there are fewer people “participating” in the labor force. If fewer people are working or actively looking for a job, that is a bad thing. Overall it was a solid number but the sector still has hurdles to jump given the fact that over 9 million jobs are available while the enhanced unemployment benefits are supposed to expire next month.
Gas prices at the pumps continue to rise as demand increases during the summer months. In addition, supply has also slowly decreased. The national average price for a regular gallon of gasoline rose to 3.19% from $3.13 a month ago. A year ago the price was $2.18. Prices could inch higher but there should be a drop-off in the fall with fewer drivers on the roads.
Courtesy of Mortgage Market Guide
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Thursday – August 5, 2021
The labor market got a much-needed shot in the arm in July as employers went on a hiring spree. The Bureau of Labor Statistics reports that there were 943,000 jobs created in July while May and June were revised higher by 119K. The numbers showed that the Unemployment Rate fell to 5.4%, while wages were up by 0.4% monthly and 4% annually, both above estimates. Total unemployed, or the U6 number, fell to 9.2% from 9.8% in June and down from 16.5% in July 2020.
The Labor Force Participation Rate was unchanged at 61.7% and remains stubbornly low … meaning there are fewer people “participating” in the labor force. If fewer people are working or actively looking for a job, that is a bad thing. Overall it was a solid number but the sector still has hurdles to jump given the fact that over 9 million jobs are available while the enhanced unemployment benefits are supposed to expire next month.
Gas prices at the pumps continue to rise as demand increases during the summer months. In addition, supply has also slowly decreased. The national average price for a regular gallon of gasoline rose to 3.19% from $3.13 a month ago. A year ago the price was $2.18. Prices could inch higher but there should be a drop-off in the fall with fewer drivers on the roads.
Courtesy of Mortgage Market Guide
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Wednesday – August 4, 2021
Home borrowing costs declined to lows not seen since February and remain at historically low levels. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage fell four basis points to 2.97% with 0.33 in points for the week ending July 30, 2021. The Market Composite Index, Refinance Index and the Purchase Index all lost 1.7%. Mike Fratantoni, MBA’s Senior Vice President and Chief Economist said, “Purchase application volume decreased again, reflecting the ongoing lack of inventory that continues to drive rapid home-price appreciation across the country.”
Private payroll growth slowed in July as the sector has been uneven the past 3-4 months. ADP Private Payrolls in July rose 330,000, well below the 650,000 expected and down from the 680,000 created in June. The report comes ahead of the more closely watched government Jobs Report for July on Friday morning. Leisure and hospitality payrolls increased by 139,000 jobs, below the 330,000 average in the second quarter.
Courtesy of Mortgage Market Guide
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Tuesday – August 3, 2021
CoreLogic reports that home prices nationwide, including distressed sales, rose 17.2% in June 2021 compared with June 2020, up month over month by 2.3% in June 2021 compared with May 2021. Prices continue to rise due to high demand and low inventories. “With plenty of cash on the sidelines, along with very low mortgage rates, prices are heading up and affordability will become a more acute issue for the foreseeable future,” said Frank Martell, President and CEO of CoreLogic. Looking ahead, prices are expected to cool to just a 3.2% gain from June 2021 to June 2022.
The Federal Reserve released its July 2021 Senior Loan Officer Opinion Survey on Bank Lending Practices addressing demand for bank loans to households for Q2 2021. Banks eased lending standards across most categories of residential real estate (RRE) loans, on net, and reported stronger demand for most types of RRE loans over Q2 of 2021. Banks also eased standards and reported stronger demand across all three consumer loan categories … credit card loans, auto loans and other consumer loans.
As the nation climbs back to more normal times economically, rising home prices could be a positive for those still in forbearance programs. In the latest numbers, the share of Fannie Mae and Freddie Mac loans in forbearance fell two basis points to 1.79% while Ginnie Mae loans declined five basis points to 4.30%. Some homeowners coming out of the program may not be able to come to terms with their lender for a suitable plan to stay in the home. Unlike in the Great Recession, where those who were near foreclosure saw their home values plunge and were underwater, this time around prices and equity have increased and it is extremely easy to sell a home in most parts of the country. So the owner can most likely sell the home, pay off the debt to the bank and walk away without a negative mark on a credit report and possibly some equity thrown from the price increase.
Courtesy of Mortgage Market Guide
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Monday – August 2, 2021
Manufacturing activity eased in July from June but has increased now for the fourteenth consecutive months. The ISM Index fell to 59.5 last month from the June reading of 60.6. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting. The employment component increased while the new orders index declined. A spokesperson from the the ISM said, “Manufacturing performed well for the 14th straight month, with demand, consumption and inputs registering growth compared to June.”
It’s Jobs Week! ADP Private Payrolls and the Jobs Report for July will be released this week. Maximum employment is half the Fed’s mandate and its recent under performance is the reason why the Fed says “now is not the time” as it relates to tapering. Non-Farm Payrolls are expected to rise in a range of 900,000 to 1 million and come after 850,000 jobs were created in June, which was below expectations. ADP Private Payrolls will be released on Wednesday and the government’s Jobs Report on Friday.
Lawmakers in D.C. urge the Biden administration to immediately renew and extend the eviction moratorium on renters until Oct. 18 after the House failed to pass a bill to prevent the lapse this weekend. On the home foreclosure front, the FHA released the following on Friday: The Federal Housing Administration (FHA) on July 30, 2021, announced an extension of its moratorium on evictions for foreclosed borrowers and their occupants through September 30, 2021, and noted the expiration of the foreclosure moratorium on July 31, 2021.
Courtesy of Mortgage Market Guide
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